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In defense of pbpapa, I have been involved with a couple of audits where no proof of stock origin was to found. The auditor reviewed the efforts I had made at establishing a "reasonable basis" and no change was made.

Do not underestimate the records the stockholder services department of the company's stock you hold can provide you. Contact stockholder services first to find out what type of stock purchase or stock bonus plans the company had in the past. By giving the name and social security number of the original holder of the stock, they may be able to come up with annual distributions of the stock for you. Or maybe it was paid for over time and distributed once every 5 years or something. You won't know until you ask. With basic info such as this, a tax pro will be able to help you establish a reasonable basis to use on a tax return. And if you inquire at a time of the year other than tax season, you might even get a person who will be civil with you!

Unless there is some huge estate tax potential, it is best to earmark stock gifts in a will rather than a predeath transfer. We still get stepped up basis on stock at death. And who knows what a future Congress with do once we get closer to the end of the life of the current estate tax changes. None of these estate tax law changes are engraved in granite.

I agree also with pbpapa that brokers should make some kind of effort to establish basis of stock deposited into an account. As a tax preparer who has everything all at once dumped on her desk within 2 1/2 short months, it's a tremendous burden to add that task to our workload.

I just spent 6 1/2 hours establishing basis for my brokers personal tax account so he can do his 2000 tax return! But he did provide me with all the printouts from the brokerage firm. So although it was time intensive because of the volume of transactions, it was not hard work.

And you wonder why a taxpreparer at tax time will elect to file an extension for your taxes????

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